The economic benefits of being healthy in Malaysia

This article is a submission courtesy of Universiti Malaya.

In Malaysia, the intersection of health and economics forms a crucial aspect of the country’s dynamic socio-economic landscape.

Personal well-being drives the economy significantly beyond just physical health. This connection becomes increasingly pertinent in the context of escalating healthcare costs.

In today’s economic climate, embracing a healthy lifestyle is not merely a personal choice but an essential economic strategy.

The 2022 “Direct Healthcare Cost of Non-communicable Diseases in Malaysia Report” by the Ministry of Health Malaysia (MOH) sheds light on this relationship.

Cardiovascular diseases, diabetes, and cancer—leading causes of morbidity and mortality in Malaysia—incurred direct healthcare costs of RM9.65 billion in 2017.

This figure represented nearly 40% (38.91%) of MOH’s annual budget of RM24.8 billion in 2017. To put it in perspective, for every RM100 in the MOH budget, RM40 went to managing these critical health issues.

On a macroeconomic level, the implications are profound. Healthcare expenditure in Malaysia accounts for about 4% of its GDP, according to the World Bank. This expenditure reflects the financial burden of managing chronic diseases.

The Malaysian workforce suffers significantly from health issues. According to the Malaysian Employers Federation (MEF), businesses incur RM20.71 billion in annual costs (or RM56.74 million per day) due to absenteeism and presenteeism related to health problems.

Promoting healthier lifestyles can reduce these costs, freeing up valuable resources for other vital sectors, such as education and infrastructure development.

Effective health management enhances workforce productivity and reduces economic losses attributed to health issues.

Public health directly impacts Malaysia’s insurance and pension systems. Healthier individuals are less likely to make substantial claims on health insurance or takaful.

They are also more likely to maintain an active lifestyle post-retirement, reducing the financial strain on pension funds. The Employees Provident Fund (EPF) highlights that healthier retirees contribute to a more sustainable pension system, drawing on their savings more gradually over time.

Malaysia’s healthcare sector not only supports public health but also significantly contributes to the nation’s GDP and employment.

Advancements in medical technology, preventive care, and wellness programmes bolster the sector. These developments enhance healthcare delivery and open new economic avenues, creating jobs and business opportunities.

The link between education and health is particularly crucial. The National Health and Morbidity Survey 2022 indicated that the percentage of overweight (15.2% to 16.2%) and obese (13.3% to 14.3%) adolescents steadily increased from 2012 to 2022, a concerning trend that underscores the need for addressing health issues within the education system.

Healthier students are demonstrably better learners. The Journal of Physical Activity and Health’s article “Impact of the Active Healthy Kids Canada Report Card: A 10-Year Analysis” shows that healthier students achieve better learning outcomes. The report card’s influence on policy, awareness, and education highlights that better physical activity and health positively impact students’ academic performance, attendance, and behaviour, supporting the link between health and learning.

The recent COVID-19 pandemic underscored the critical role of health in economic resilience. Countries with robust health infrastructures and healthier populations managed the crisis more effectively, minimising economic disruptions. Malaysia’s proactive health measures during the pandemic played a crucial role in mitigating the economic impact of the crisis.

Investing in health yields substantial long-term economic benefits. A study by The Brookings Institution indicates that for developing countries, the return on investment in health ranges from USD2 to 4 for every USD1 invested.

For example, a USD1 million investment in health could result in economic returns between USD2 million and USD4 million, demonstrating a 100% to 300% return on investment.

Prioritising health can be a catalyst for a broader virtuous cycle of growth, as healthier individuals are more productive, contributing to economic development and prosperity. This creates a positive feedback loop where health and economic growth reinforce each other, promoting sustained development and improved quality of life.

This aspect becomes increasingly important considering Malaysia’s ageing population, where the proportion of people aged 65 and above is projected to reach 14.5% by 2040. Maintaining the health of the workforce is crucial for sustained economic growth and stability.

Malaysia faces environmental challenges such as urbanisation, lifestyle changes, and pollution. These present both challenges and opportunities for the healthcare system. Addressing these issues through sustainable development policies and health education can further strengthen the nation’s economic resilience.

The integration of technology in healthcare, through telemedicine, digital health records, and AI-driven diagnostic tools, is transforming the healthcare landscape. These innovations make healthcare more accessible and efficient and create new economic and employment opportunities.

Increasing awareness of health and wellness has spurred growth in related industries such as fitness, nutrition, and mental health services. This contributes to a healthier population and diversifies the economy, creating new jobs and fostering new business sectors.

The Malaysian government’s investment in health infrastructure—hospitals, clinics, and research facilities—plays a vital role in this economic dynamic. These investments improve healthcare delivery and stimulate the construction, medical equipment, and pharmaceutical industries, contributing significantly to the economy.

Community health initiatives, including public health campaigns and free health screenings, play a critical role in preventive care. These initiatives help reduce the burden on healthcare facilities and educate the population, leading to healthier lifestyle choices and reducing the incidence of chronic diseases.

Malaysia’s position as a medical tourism hub also significantly contributes to its economy. Offering high-quality medical services at competitive prices, Malaysia attracts patients from around the world, generating revenue and bolstering its international standing in healthcare.

In conclusion, the multifaceted economic benefits of good health in Malaysia are significant and wide-ranging. From individual savings to impacts on the national budget, health is an invaluable asset. As Malaysia continues its development, prioritising health will pave the way for a more economically robust and healthier nation. Investing in health is not just a moral imperative but a smart economic strategy.